By Manya Saini and Nivedita Balu
(Reuters) -Northern Trust’s CEO said on Wednesday that he has not entertained sale discussions and does not intend to, after the wealth and asset manager reported a second-quarter profit that beat estimates.
The Wall Street Journal reported last month that BNY had approached the company about a potential merger. Northern Trust, which has a market cap of about $24.6 billion, later said it was fully committed to remaining independent.
Shares in the company were last down 3%, which analysts at Truist attributed to the CEO’s denial that the company is up for sale.
“Contrary to recent speculation, during my tenure as CEO, we have never entertained discussions regarding the sale of the company with any financial institution, nor do we intend to,” CEO Mike O’Grady told analysts during a post-earnings conference call.
“We believe that strategy of independence is what will produce the best returns for our shareholders ultimately.”
While dealmaking in the broader banking sector is expected to pick up this year on hopes of looser regulation under the Trump administration, Senator Elizabeth Warren warned BNY that its reported interest in a merger with Northern Trust could violate federal banking laws.
The comments follow a strong second quarter for Northern Trust, where its assets under custody and administration climbed 9% to $18.1 trillion.
Major U.S. indexes received a boost from a late-quarter rebound, fueled by optimism around potential interest-rate cuts and progress on trade negotiations.
Markets had been rattled earlier in the quarter by changing U.S. tariff strategies and rising geopolitical strain.
Assets under management rose 11% during the same period.
Meanwhile, net interest income rose 16% in the reported quarter. Trust, investment and other servicing fees increased 6%.
Northern Trust posted a profit of $2.13 in the three months ended June 30. Analysts on average had expected $2.05 per share, according to estimates compiled by LSEG.
(Reporting by Manya Saini in Bengaluru and Nivedita Balu in Toronto; Editing by Pooja Desai and Shailesh Kuber)
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